What was the name of the 1990s Japanese asset-price collapse that preceded the country’s prolonged economic stagnation?

The Japanese asset price bubble was the late-1980s boom in Japanese stock and real-estate prices that collapsed in the early 1990s. Its aftermath preceded Japan’s prolonged period of weak growth, financial stress, and persistent low inflation.

The bubble expanded amid easy credit, optimistic expectations, and rapidly rising land and equity valuations. The Nikkei 225 stock-market index reached an intraday peak of 38,957.44 on December 29, 1989. Property prices also rose dramatically, especially in major urban areas.

After the bubble burst, banks were left with bad loans, businesses reduced investment, and households became more cautious. Falling asset values weakened balance sheets and contributed to years of sluggish demand. Japan also experienced periods of deflation, making debt burdens harder to reduce in real terms.

“Lost Decade” is a later nickname for the stagnation that followed, not the name of the original asset boom. The consequences continued beyond the 1990s, so some researchers refer to Japan’s “lost decades.”